The state of Market Basket: Day 34 of the standoff

Share via e-mail

By Bennie DiNardo and Jack NewshamGlobe Staff and Globe Correspondent
July 29, 2014

The protests and consumer boycott at the Market Basket grocery chain over the firing of former president Arthur T. Demoulas is well into its fifth week, and news has slowed to a trickle. The chain is losing millions of dollars a day, middle managers at the executive offices in Tewksbury remain off the job, and the board of directors is negotiating with suitors to sell the $4.6 billion company. Governors Deval Patrick of Massachusetts and Maggie Hassan of New Hampshire brought the parties together Sunday to try and broker a deal between the warring factions of the Demoulas family, to little avail. The board of directors met Monday, also without results. Arthur T. contends that the board is seeking “onerous” terms that are preventing him from buying the 50.5 percent of the company controlled by his cousin, Arthur S. Demoulas.

1. Stores

All 71 Market Basket stores in Massachusetts, New Hampshire, and Maine remain open, but shelves are empty in the produce and meat sections, though other shelves are well stocked. Few customers are coming in, and there is little business to support the regular payroll of hundreds of employees per store. Several major vendors have cut off business with the chain, out of loyalty to Arthur T. One vendor, Boston Sword & Tuna, posted a letter on its Facebook page decrying the “incredible” blunders of the new management team.

Market Basket took thousands of part-time workers off its payroll because of the decline in business. Officials in Massachusetts and New Hampshire say those workers may be eligible for unemployment benefits, but so far few have filed.

Last week, chief executives Felicia Thornton and James Gooch sent letters to several hundred workers at the company’s headquarters in Tewksbury and at company warehouses, saying if they did not report to work in three business days, “the company will consider you to have abandoned your job, thereby ending your employment with the company.” That deadline passed without any reports of firings. To date, eight senior executives have been fired for organizing the protest calling for the reinstatement of former president Arthur T. Demoulas.

3. Social media

The main avenues of communication for the protesters are their website, wearemarketbasket.com, and a “Save Market Basket” Facebook page that had attracted 88,135 likes as of Thursday. The Twitter account, @SaveMB, is less active — 1,714 followers. “Wearemarketbasket” on Instagram, where photos from the stores are posted, has 1,747 followers.

On July 23, the organizers set up a fundraising page on Go Fund Me asking for Market Basket workers who are still getting paid to help support the warehouse workers and truck drivers. As of Sunday evening, it has raised $105,912 from 1,680 donors, past a goal of $100,000. The largest donation, from “Yell-O-Glow Corporation,” a Market Basket vendor, is $6,000.

“We are not asking our customers to help them out, though we would certainly be pleased if they did,” organizers said on their website. “We are looking for associates to help fellow associates who are standing alongside each other.”

The board of directors is conferring regularly to discuss the turmoil enveloping the grocery chain and the offer to purchase it from ousted Market Basket president Arthur T. Demoulas, along with other offers it has received.

The company that owns Hannaford Bros. complicated Demoulas’s plans with a bid to buy part or all of Market Basket, according to people with knowledge of the situation. The parent company, Delhaize Group SA, said it would not “comment on rumors or speculation regarding plans to acquire or divest businesses.”

Market Basket’s board of directors said only that it is looking at multiple offers. It is under considerable pressure — the chain is losing as much as $10 million a day in sales and spoiled products because of the walkout and boycott.

Three directors said they had asked Arthur T. to return to help restore the business, but not to resume control of the grocery chain.

Arthur S. Demoulas and his side of the family broke their silence on Aug. 9 and accused Arthur T. of bad faith in negotiations over the chain. Arthur T. responded the following day, claiming they countered his proposal with “onerous” terms that are blocking a deal from being completed.

6. Family/shareholders

Demoulas Market Basket is owned by the heirs of the founder, the original Arthur Demoulas. Of the nine shareholders, five are aligned with grandson Arthur S. Demoulas’s branch of the family, and four are aligned with the Arthur T. Demoulas branch of the family. Arthur T. and his allies — sisters Frances Kettenbach, Glorianne Farnham, and Caren Pasquale — control 49.5 percent of the company. Arthur S. and his allies — sisters Diana Merriam and Fotene Demoulas and the heirs of his deceased brother, Evan Demoulas — control 50.5 percent. The shareholder ultimately will decide whether to sell their shares, and to whom.